If expansionary fiscal policy also causes higher interest rates,
a. aggregate demand increases because firms and households are discouraged from borrowing and spending.
b. aggregate demand decreases because firms and households are discouraged from borrowing and spending.
c. aggregate demand increases because firms and households are encouraged to borrow and spend.
d. aggregate demand decreases because firms and households are encouraged to borrow and spend.
b. aggregate demand decreases because firms and households are discouraged from borrowing and spending.
You might also like to view...
The ________ curve intersects the average variable cost curve at the minimum value of the average variable cost curve.
A. average fixed cost B. marginal cost C. total cost D. total variable cost
Define economics. Who are economic agents?
What will be an ideal response?
Operation on the basis of comparative advantages implies which of the following?
(a) Countries allocate their resources across all sectors regardless of opportunity costs. (b) Countries will specialize even if they can produce everything. (c) Countries not efficient in any production should not trade. (d) none of the above.
Refer to Scenario 7.2. What is the marginal cost of the 60th earthquake detector?
A) 0 B) 5 1/2 C) 3 D) 5 E) none of the above